An Advisor’s Guide to the Series 7 License

Obtaining the Series 7 license is an important step for many financial advisors on their climb up the career ladder.

But clearing this obstacle is not without its challenges. To obtain their licenses, financial advisors must pass the Series 7 exam, which is no easy feat.

Once they’ve cleared this hurdle, however, new professional doors may open in financial advising, investment management and other roles.

Here’s what advisors should know about the Series 7 license and Series 7 exam.

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What Is a Series 7 License?

The Series 7 license is the common moniker for the General Securities Representative license. The Series 7 exam, which you must pass to get the license, is administered by the Financial Industry Regulatory Authority, or FINRA.

Candidates must answer 125 multiple-choice questions within 225 minutes. To pass, they must get 72% of the questions correct. In addition, a candidate must be sponsored by a FINRA member firm.

In contrast, the Series 65 license, which allows a candidate to join a registered investment advisory firm, has no sponsorship requirement.

The Series 7 exam is a prerequisite for other securities licenses. But the exam itself has its own prerequisite. Candidates must first pass the Securities Industry Essentials exam. That exam assesses basic knowledge of the securities industry and covers markets, regulation, risk and prohibited actions.

[Read: Financial Advisor Versus Financial Planner: What’s the Difference?]

How to Prepare for the Series 7 Exam

The rigor of the exam trips up many candidates. Some give up after one failed effort. Others go back and try again, adapting their study habits.

“I actually failed the first time by 2 points, so I had the pleasure of taking it twice,” says Alyson Burkett, a financial advisor with LPL Financial. “Eleven years later, I still remember that it was 2 points.”

Burkett redoubled her efforts. She had taken a Series 7 study course through Kaplan, doing the self-study course, along with an instructor-led review class. “When I failed the exam, I went and sat through the weeklong course in person for a second time. I read the book multiple times, took practice exams and used flashcards,” she says.

Upon passing the Series 7, Burkett opted for a career with a broker-dealer on the recommendation of a mentor. She appreciated the opportunities that came with getting her securities license. “There was about a one-year training with others that were also starting out in the business, taking the exams at the same time and trying to find our place in the securities industry,” she says.

She offers some tips for others hoping to pass their Series 7 exam. “I would recommend live instructor-led sessions, in-person study groups, Zoom study groups and finding a mentor to help keep you accountable,” she says. “I found it very helpful to create a study schedule and timeline to stay on track. It feels like once you can cross off those difficult chapters and practice exams, you are making progress. Even though it feels like that Series 7 book is giant, you will make it through.”

Several employees at BFG Financial Advisors passed the Series 7 after the preliminary SIE exam — like Monica Pozuc, an investment operations associate at the firm in Timonium, Maryland. She was hired after graduating from college, and it was mandatory for her to pass the Series 7 exam, as well as the Series 66, the Uniform Combined State Law Examination.

Pozuc used a test-prep program from Kaplan, which included books, online courses and a bank of questions that she says were very similar to what appeared on the actual test. “I also was lucky enough to be studying at the same time as a few other co-workers, so we would meet to study in groups periodically,” she says.

[Read: The Best Podcasts for Financial Advisors]

What Jobs Can You Get With a Series 7 License?

A Series 7 license can be the launching point for many careers in financial services. You could start as a registered representative, an entry-level position, then work your way up to being a personal financial advisor who helps people create financial plans. Or you could choose a less customer-facing role by focusing on investment management and handling client investments directly.

The Series 7 license allows you to sell most financial securities. Without the license, you wouldn’t be able to place trades for clients, which is why most big firms require employees to get licensed as soon as they’re hired.

Pozuc’s colleague Andrew Harrell, an associate advisor, also joined BFG out of college. He was seeking a firm that would be a good fit for the career path he wanted to pursue. He also was required to pass the Series 7 exam and used the Kaplan test-prep materials.

He says putting in the hours is key to passing. “Although the Series 7 may be referred to as one of the more complicated series examinations, if you put the time in and study the material, you will be successful,” he says. “A passing result will be worth the struggle in the end and can lead to several opportunities for your career path.”

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An Advisor’s Guide to the Series 7 License originally appeared on usnews.com

Update 08/19/21: This story was published at an earlier date and has been updated with new information.

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